Arab News Japan

TOKYO: A survey of economists by the Nikkei newspaper has found that a majority believe the increase in the number of foreign residents in Japan will enhance the country’s fiscal balance, thanks to their prospective tax and social insurance contributions, which could help raise the living standards of the average citizen in Japan.

Nikkei, in collaboration with the Japan Center for Economic Research, asked nearly 50 economists to form an Economics Panel in 2024 and this panel took up questions related to fiscal and financial issues, as well as Japan’s policies regarding overseas nationals.

Two-thirds of the panelists agreed that an increase in the number of foreign residents in Japan could improve the nation’s fiscal balance.

They pointed out that more foreign workers would help alleviate labor shortages, as well as making significant contributions in tax and social security premiums. Many of the panelists said it was important to make it easier for foreign residents to live in Japan and to address their needs.

As of the end of last year, Japan had around 3.7 million foreign residents, an increase of 11 percent from the previous year. While many in Japan believe foreign workers can benefit the country, concerns remain that failure to integrate may disrupt civic order. Seventy-six percent of respondents agreed that foreign workers would help raise living standards.

“Greater acceptance of foreigners will boost the ratio of prime-age labor force and result in higher tax revenue and social security contributions,” said KASAHARA Hiroyuki, a professor of international trade at the University of British Columbia in Canada.

However, more foreign workers would require the country to provide adequate education and benefits for when they retire.

KONISHI Yoshifumi, a professor of empirical microeconomics at Keio University, said there was a need to create long-term institutional arrangements to accommodate foreign workers.

Many economists emphasized the benefits of diversity in terms of raising economic growth. “New ideas introduced in workplaces can enhance productivity,” said NAKATA Taisuke, an associate professor of macroeconomics at the University of Tokyo.